Question

Directions: Select the best answer for the following multiple choice questions.

1. Which of the following is not part of the basic financial statements?

a. Governmental funds statement of revenues, expenditures, and changes in fund balances.

b. Budgetary comparison schedules - general and special revenue funds.

c. Government-wide statements of activities.

d. Notes to the financial statements.

2. Which statement is true regarding the "major" funds?

a. The general fund is considered major if it is large enough.

b. Other funds are considered major if both of the following conditions exist: (1) total assets of that individual governmental or enterprise fund constitute 20% of the governmental or enterprise categories, and (2) total assets are 10% of the total of the governmental and enterprise categories.

c. A government cannot choose to reflect a fund as major even if it does not meet the criteria for major funds.

d. All of the above are false.

For each independent situation, please choose the best answer for each question. Please provide an explanation as to why you chose your answer. Thank you.

Answer 1

1. Option b Budgetary comparisons schedule-general and specific revenue funds.

Budgetary comparisons schedule is required as a supplemental information and not as basic information.

2.Option D. All of the above are false.

Because , general funds are always considered to be major fund. In option B the percentages are incorrect the correct percentages are 10%and 5% respectively.

And in option C A government is allowed to choose to reflect a fund as major even if it does not meet the criteria for major funds.